Why Wholesale

 

WHY SHOULD YOU WORK WITH A WHOLESALE LENDER?

 

 

Pricing:  Wholesale lending offers better pricing in about 92% of the loan scenarios.


Service:  Having been focused on the purchase market for the last three years, we know what top Realtors expect when it comes to a lender, and can give the client the best overall pricing/experience.

Knowledge:  I’ve become a trusted adviser to most of the Realtors that I work with.  I currently work with all Realtors of all skill sets to help them understand the complexities of the lending environment.

Size:  C2 Financial is California’s largest Wholesale lender.  We currently have 110+ lenders to get you the best rate.  Having multiple lenders gives you access to multiple programs at different banks.

 


 

Why are my rates so much lower than everybody else’s?

While there are many options for individuals looking for a lender in the market place, most clients have a difficult time deciding which lender can offer them the best rate.  I have found that most Loan Officers don’t even comprehend the difference between a Wholesale lender, a Correspondent Lender and a Retail Lender.  To ask a client to make sense of it all seems to be an unfair request.  When shopping for a loan, the most common mistake is that a person will shop a retail lender against another retail lender (Wells Fargo against CHASE).  This is a critical error and could end up costing the client tens of thousands of dollars.  In order to get the best rates, the prospective borrower must compare different lenders from different licensing agencies (Wholesale Lenders vs. Correspondent Lenders vs. Retail Lenders).

 

Currently a client looking for a home mortgage loan has three options:  A wholesale lender, a correspondent lender and a retail lender. Having worked under all three licensing organizations I recognized something early on.  Wholesale lending provided the best pricing for the clients. I’d like to share some of the basic tactics that are used to lure people into much more expensive mortgages than they should be getting.  How much is this simple mistake costing you?

When a mortgage transaction occurs, there are three primary parties to the transaction; The Borrower, the Loan Officer and the Lending Institution.  Having been a wholesale lender (BRE license), a Correspondent lender (DBO license) and a loan officer with a National Bank (No license required), I’ve personally experienced all three options that a potential borrower has available to them.

After more than a decade of research, I have come to the very decisive conclusion that the wholesale lending environment still offers the single best outcome for the client.  While there are a number of reasons for this decision let us look at the most obvious.  A wholesale lender will have much better interest rates, a wider selection of both banks and programs, the licensing process for the loan officers, and mandatory disclosures that wholesale lenders have to provide.

WHOLESALE LENDING.  These individuals are licensed through the (now) BRE (formally known as the Department of Real Estate).  They typically work with multiple banks and are 1099’d opposed to W2’d, as found in the other two scenarios.  They characteristically have more aggressive programs and much better pricing, relative to the other options.  As such, wholesale lenders historically have focused on refinance transactions.  When working with a wholesale lender, they must disclose how much money is being made on a transaction, whereas the other two lenders don’t need to disclose this material information.  In fact, the Correspondent Lender and the national banks don’t even disclose to their own loan officer how much money is being made on a loan.

CORRESPONDENT LENDING.  Known as a “banking line”, should be thought of as in between a wholesale lender and a national bank.  Most correspondent lenders are governed by the Department of Business Oversight (DBO, formally the DOC).  They usually can broker loans for better pricing, but most either refuse to do so, or make their loan officers use the banking line because there’s more money for the bank when they use their banking line.  A typical correspondent lender will underwrite in house.  While they sell you on “service” and the promise to close 5-7 days sooner than a wholesale lender can, their interest rates are usually about .375%-.5% higher than a wholesale lender.  On a $400,000 loan, this equates to about $7,000 difference in payments over the first five years alone and a staggering $42,000 difference over the entire life of the loan.

Most correspondent lenders are focused upon purchase money transactions, and have the benefit (to the lender) of not showing the client how much money is being made on a transaction. Rates are notably higher than that of a wholesale lender.  These lenders include but are not limited to Amerifirst, Blue Fi, and WJ Bradley.

 

Retail Lenders: Believe it or not, a nationally chartered bank’s loan officers don’t have to be licensed.  National banks offer employees and clients the recognized name brand.  Much like buying a name brand, such as Chanel, national banks pricing is typically higher in costs as well.  These lenders include Wells Fargo, CHASE, Bank of America and Everbank.  The reasons why national banks typically have higher interest rates is due to the fact that they must support their infrastructure.  Brick and mortar locations, employee benefits programs, health insurance, matching contributions, employee waste, office equipment, support staff and large CEO and management bonuses are quite costly.

Aside from their pricing, another definitive drawback the retail lender is that you have one chance and one chance only to get a loan approved, as opposed to a wholesale lender who will typically have hundreds of programs through many lenders.  Employees typically make about 1/3 of a normal payout of a regular loan officer, but rates don’t reflect this lower payout.  Employee sentiment and commitment to service tend to be lower.  THERE ARE NO LICENSING REQUIREMENTS OF BANK EMPLOYEES.  Programs are limited.  Turn times have been extremely slow.

 

IN 95% OF SCENARIOS, THE WHOLESALE LENDER OFFERS THE BEST INTEREST RATE.  When applying for a loan, there are hundreds of pieces of information that are factors in obtaining a loan.  Credit score, loan to value, debt to income, assets, level of education, number of dependents, years of work, etc.  Lending is very niche industry, and if you find the best lender, but one of your key pieces of information changes (say your credit score drops), then bank number 99 may no longer be the best bank to go to as bank number 11 may be better.  If you’re with one bank as with a national bank, you’re subject to their rates, no matter what happens to your underwriting factors.

Over the last number of years the Correspondent lenders that I’ve worked with, brainwash their loan officers that “Rate is irrelevant, as long as you close on time” and “Rate is irrelevant, because we give better service”.  RATE IS ALWAYS RELEVANT.  Why punish the home buyer for the next 30 years because you can close a loan a week sooner than a wholesale lender?

Time is money and sometimes taking a little more time means saving more money.  I think most of us have wanted to purchase something and took an extra day or two to shop around to make sure we got the best price.  There is no reason that you shouldn’t give your home loan the same time, thought, and care.

 

Wholesale Lending:  The Best Experience Possible.  Working with a wholesale lender gives me (and my clients) access to over 100 lenders. One of the biggest mistakes people make is they walk into a brick and mortar bank and think that they’re going to get the best rate.  If your loan officer works for a national bank, who’s product do you think will be offered to you?  Is your loan officer trying to get you the best rate, or sell you what they have?  Are multiple lending scenarios available, or can they only offer one scenario; one scenario with one set of guidelines that you must meet in order to qualify?  Do they work for the client, or do they work for the bank?  Who’s needs are being met?

Conversely, as a mortgage lender, I understand that I work FOR THE CLIENT, and have many options available to find the best pricing.  As mentioned, I use a software program that searched out all 100 lenders to tell me who has the single best pricing available to the client.  I don’t care who is paying me, I just want the best pricing.  Not only am I doing a better job for my client, but I’m also adhering to the fiduciary ethic that I believe in, and am giving myself a higher probability that I won’t lose that loan to somebody that has a better price.  As such, this is a win, win, win situation for both me and my client, and the bank who actually offered the best rate in that particular situation.

In the highly competitive mortgage servicing space, I strive to out perform, out produce, and outlast the competition.  That is why I incorporate experience, responsiveness, transparency, and technology into every aspect of my methodology and approach.

 


Lenders List

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We currently work with 100+ Lenders

Some of them include:

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Wells Fargo |  Stearns Financial  |Quicken Loans | FlagStar Bank | Freedom Mortgage |

Union Bank  |New Pen Financial  |  Sun West  | Franklin American  |  US Bank  |  CMG

Kinecta Federal Credit Union  |  Luther Burbank  | Capital Mortgage  |  Bank of Internet

Carrington Mortgage Services |  JMAC Lending  |  Sierra Pacific Mortgage  | Broadview Mortgage

Pacific Union Financial Wholesale  |  Plaza Home Mortgage |  Provident Funding

United Wholesale  Mortgage  |  Essex Home Mortgage  |Clear Vision Funding

First Guaranty Mortgage Corp Wholesale  |  American Financial Resources

American Home Equity  |  ICON Residential Capital  |  IMPAC Wholesale | Provident Bank Mortgage

First Mortgage Corporation  |  Florida Capital Bank  |  Freemont |  Home Bridge Wholesale  |

InterBank  |  LD Bank  | Luxury Mortgage  |  Maverick Funding  |  MFG Banking |

Michigan Mutual Inc. |  New American Funding  |  Pacific Union Financial  |  Parkside Lending  |

Plaza Mortgage  |  Provident Bank Mortgage  |  Provident Funding Wholesale  |

REMN Wholesale  Rushmore  |  Total Mortgage Inc. |  TCF